HP shutting down webOS device operations

HP made their quarterly fiscal report today and announced that they planned to discontinue operations for webOS devices including their TouchPad and webOS (formerly Palm) phones. Wow.

In the press release, HP did leave the door open stating they will continue to explore options to optimize the value of webOS software going forward. What this means is anyone's guess. As our friends at PreCentral note, HP is discontinuing operations for webOS devices, not the OS itself.

Could we see HP follow suit and license out webOS to, say, HTC? Could HP take advantage of all the headaches/litigation Android is creating and offer manufacturers an alternative? Personally, I just don't see HP giving up on webOS after, only a year ago, spending $1.2 billion to acquire the system. On the other hand, who is interested in licensing an OS that has failed to catch on? Twice.

What does this mean for everyone else? I'm not sure if it will really impact Microsoft, Google, Apple or RIM. While webOS devices have a strong following, they were on a downhill slide when HP acquired Palm and never took off. With Mango just around the corner, Microsoft may be able to attract Pre customers with webOS's future being uncertain.

As a former Palm user (still have my first Palm Pilot) I hope HP finds a way to keep webOS as a viable system. One thing is for certain though, it seems these days the smartphone industry is constantly changing.

You can read HP's full press release on their quarterly report after the break.

Update:The Verge confirms that HP is not killling WebOS as a platformand they are looking for partners and options. In short, they're killing HP's attempt at hardware noting that they need to stop putting under-performing hardware in the market. Still, WebOS's future, even as an OS, obviously remains in dire straits.

PALO ALTO, Calif.--(BUSINESS WIRE)--HP (NYSE: HPQ) today commented on the recent announcement by Autonomy Corporation plc (LSE: AU.L). HP confirms that it is in discussions with Autonomy regarding a possible offer for the company.

HP also reported that it plans to announce that its board of directors has authorized the exploration of strategic alternatives for its Personal Systems Group (PSG). HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction.

In addition, HP reported that it plans to announce that it will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. HP will continue to explore options to optimize the value of webOS software going forward.

HP today announced preliminary results for the third fiscal quarter 2011, with revenue of $31.2 billion compared with $30.7 billion one year ago.

In the third quarter, preliminary GAAP diluted earnings per share (EPS) was $0.93 and non-GAAP diluted EPS was $1.10, compared with third quarter fiscal 2010 GAAP diluted EPS of $0.75 and non-GAAP diluted EPS of $1.08. Non-GAAP diluted EPS estimates exclude after-tax costs related primarily to the amortization of purchased intangible assets of approximately $0.17 per share and $0.33 per share in the third quarter of fiscal 2011 and fiscal 2010, respectively.

For the fourth fiscal quarter of 2011, HP estimates revenue of approximately $32.1 billion to $32.5 billion, GAAP diluted EPS in the range of $0.44 to $0.55, and non-GAAP diluted EPS in the range of $1.12 to $1.16. Non-GAAP diluted EPS guidance excludes after-tax costs of approximately $0.61 to $0.68 per share, related primarily to restructuring and shutdown costs associated with webOS devices, the amortization and impairment of purchased intangibles, restructuring charges and acquisition-related charges.

HP estimates full-year FY11 revenue will be approximately $127.2 billion to $127.6 billion, down from its previous estimate of $129 billion to $130 billion. FY11 GAAP diluted EPS is expected to be in the range of $3.59 to $3.70, down from its previous estimate of at least $4.27, and FY11 non-GAAP diluted EPS is expected to be in the range of $4.82 to $4.86, down from its previous estimate of at least $5.00. FY11 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $1.16 to 1.23 per share, related primarily to restructuring and shutdown costs associated with webOS devices, the amortization and impairment of purchased intangibles, restructuring charges and acquisition-related charges.

HP will host a conference call with the financial community today at 2 p.m. PT / 5 p.m. ET to discuss these announcements well as HP’s third quarter 2011 financial results. The call is accessible via an audio webcast at www.hp.com/investor/2011q3webcast.

About HP

HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world’s largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services and IT infrastructure at the convergence of the cloud and connectivity, creating seamless, secure, context-aware experiences for a connected world. More information about HP is available at http://www.hp.com.

Use of non-GAAP financial information

To supplement HP’s consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash. HP also provides forecasts of non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for this quarter and prior periods is included in the tables below. In addition, an explanation of the ways in which HP management uses these non-GAAP measures to evaluate its business, the substance behind HP management’s decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP management compensates for those limitations, and the substantive reasons why HP management believes that these non-GAAP measures provide useful information to investors is included under “Use of Non-GAAP Financial Measures” after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for operating profit, operating margin, net earnings, diluted earnings per share, or cash and cash equivalents prepared in accordance with GAAP.

Forward-looking statements

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any projections of revenue, margins, expenses, earnings, tax provisions, cash flows, benefit obligations, share repurchases, currency exchange rates, the impact of acquisitions or other financial items; any statements of the plans, strategies and objectives of management for future operations, the exploration of strategic options for PSG and the execution of cost reduction programs and restructuring and integration plans; any statements concerning the expected development, performance or market share relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending business combination transactions; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the impact of macroeconomic and geopolitical trends and events; the competitive pressures faced by HP’s businesses; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by HP and its suppliers, customers and partners; the protection of HP’s intellectual property assets, including intellectual property licensed from third parties; integration and other risks associated with business combination and investment transactions; the hiring and retention of key employees; assumptions related to pension and other post-retirement costs; expectations and assumptions relating to the execution and timing of cost reduction programs and restructuring and integration plans; the possibility that the expected benefits of pending business combination transactions may not materialize as expected or that the transactions may not be timely completed; the resolution of pending investigations, claims and disputes; and other risks that are described in HP’s Annual Report on Form 10-K for the fiscal year ended October 31, 2010 and HP’s other filings with the Securities and Exchange Commission, including HP’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2011. As in prior periods, the financial information set forth in this release, including tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be meaningful, these amounts could differ materially from actual reported amounts in HP’s Form 10-Q for the quarter ended July 31, 2011. In particular, determining HP’s actual tax balances and provisions as of July 31, 2011 requires extensive internal and external review of tax data (including consolidating and reviewing the tax provisions of numerous domestic and foreign entities), which is being completed in the ordinary course of preparing HP’s Form 10-Q. HP assumes no obligation and does not intend to update these forward-looking statements.

guys,you got to be kidding me. I went to a Sprint store to buy an HTC Arrive now that Pre is dead. I had to look for it back in the corner. The salesperson did not know they had a Windows phone. He had no idea how to use it and thought they have not sold one in a month. I wonder where i've seen this before.... WebOS?I played with the phone for about 30 minutes. Besides the tiles that I'm not in love with it looks a lot like Android. You click the back button until you get dizzy Actually Android looks a little cleaner. The first page I tried to browse told me it does not support aspx. I went there convinced I will buy WP and I left with no reason to ever do so. Yeah,supposedly Mango is the best thing since Pre 3 but this phone will never see an upgrade. So why would I become their first buyer?The guy said that thy expect two new Blackberries with the new operating system. I hope finally for a pleasant surprise.

Sure, insults are going to sell this stuff. If you can't take an honest opinion from a user who actually entered a store to buy this stuff (and there aren't many of those) then continue to live in your virtual world. You could have given me some tips that the salespeople obviously can't. But why bother? Call me names and enjoy the rest of the day.I found my short experience quite frustrating. The interface is quite loud with all kinds of pictures thrown at me without a very clear order (maybe in time you get used to it).

those are called live tiles which are to convey information from each app that supports it, so that u dont have to go into an app to see what's going on, as for the email tiles they are all shown on the lock screen and in mango u can band them together into one or 2 inboxes to make things alot easier, social updates,texting,and IM are also in one place as well too. taking the time to actually figure this out is much better than going into a WP enthusiast community to bash the OS. its the same as going into a Latino or African American community and shouting racial slurs. yea see if u get far doing that.

Well my timing is not usually this good, but I jumped from Sprint/WebOS to Verizon/Windows yesterday!I had had this sinking feeling for some time that WebOS was just never going to go anywhere due to HP's lack of support. Turns out I was right.So I guess this is my new home for a while -- got an HTC Trophy yesterday and have been busy setting it up and playing with it -- so far I am impressed and am VERY excited to see what Mango will bring when it arrives.So long Palm & WebOS -- it was fun for a lot of years... Hello WP7!

I love the hardware. The tilting screen is a nice idea, makes the Evo slider look old. The interface though that I see people praising around here was quite frustrating to me. The back button that seems to be common to all remaining phones kills me. Can't they find a better way to navigate between apps? The tiles are (visually) loud and kind of wasteful. What sold the Pre to me was having all my communication in one spot. If I put a tile for each account then I have to scroll to even see all notifications. I understand they are trying to gain coolness with all those people's faces scrolling around everywhere but I found that rather annoying. And the lack of any help (in store, manual or web) that could give me hope that I could customize it a little better for my use makes it a no-buy. I can't get into a 2 year contract based on hope.The other frustrating thing is the "..." button for settings. It's not consistent in all apps and it is to close to the bottom. Half the time I trigger the "search" button which brings Bing up, just adding to my frustration. Again, something to get used to but not a good first impression in the store.

I feel bad for all the TouchPad owners... It was out for what? 6 weeks? And now it's kinda worthless. I think that kind of announcement tends to push away developers. And from what I have read elsewhere it was lacking in that department to begin with.

Palm Pre Plus user here. My NE2 is due in November and I was torn between WP7 with Mango and the possibility of a Pre3. WebOS has so many great features, but I guess the decision is now fairly easy. How about WP7 incorporating things like "just type", which I'll probably miss more than anything.

HP really seems to have no clue what to do. The list of things they licenced or aquired only to give up after a half harted effort: from Compaq to Ipods to TabletPC to Home Servers to Windows Slates to Alphas to Web OS. Maybe they should sell all-in-one touch screen pcs and stick with that. It's the only thing that seems to have survived in their catalog for more than a few years.

I was an original Palm Pre (Sprint) user when it was first released. This phone was amazing when I got it. Over time, I noticed how all other OSs were quickly advancing while webOS was at a slow crawl. A few updates came in that improved my experience on the phone but nothing that wasn't soon overtaken by a competing os. As the 2 years came up for me to upgrade my phone, I contemplated waiting to see if by some miracle webOS would be offering something to make me stay loyal. Well that never happened and now it looks like following my gut instinct and joing the WP7 league was the right thing to do. I will miss webOS but can say that WP7 has provided me with more than I originally anticipated. And now with Mango right around the corner, I'm sure WP7 and everyone here at wpcentral will easily help me forget the past and instead to the bright future that is Windows Phone. I plan to be a loyal Windows Phone user forever!

I couldn't agree more. We finally gave up in June, canned our Pre's and switched to WP7. I can't say that we could be any more pleased. Mango is amazing and running on 2 of 3 Focii in our house. webOS was great 3 years ago but it never improved. Even after HP bought Palm. In fact development of the OS and new products slowed to a crawl. Wow, just wow.So, here we are with 3 surviving competitors. Googarola, Apple and MS WP7. Glad I'm still in the game.

But HP is also looking to 'off load' their PC business - this will affect sales of the Windows OS, especially if HP PC's are top sellers. So, as I see it, Microsoft would have a couple of things to consider - sales of Windows 7/8/future versions and the value of the webOS IP. Or maybe not :)But, if HP is willing to license webOS, it gives Samsung, HTC, and others an opportunity to use another operating system if they decide to hedge their bets against Android and WP7.

It could also not have any effect. They might just be looking to spin it off like IBM did with Lenovo. That doesn't mean shutting it down completely, that just means either selling it to another company like IBM did with Lenovo, or spinning it off to form its own company like Asus did with Pegatron.

I'm honestly quite speechless. I did not see this coming at all. Could you imagine if Microsoft took this kind of approach with WP7? "Ohh, it's only been two months and we don't own the entire market yet. SHUT DOWN EVERYTHING!"